Some Winnetka residents to pay new gas tax

Winnetka residents who purchase natural gas on the open market will begin paying a tax to the village June 1 under an ordinance approved by the village council.

The new tax is an effort to recoup declining revenue, officials said. The village already imposes a tax on the sale of natural gas by regulated utilities, Nicor and North Shore Gas, but it produced significantly less money last year -- $295,395 compared to $619,871 in 2008, according to Finance Director Ed McKee.

The new tax has to be imposed upon customers themselves, rather than the gas companies, which the village can't tax because they're outside village limits.

"We do not have the authority to go outside of our corporate limits to tax and we don't have the authority to go into the interstate market to tax," said Village Attorney Katherine Janega. "The only way to recoup losses is to impose a tax on the users themselves."

The tax is the same rate, five cents per therm, imposed on the gas companies. Nicor and North Shore will collect the taxes and be paid a 3 percent service fee of the amount collected.

The tax does not apply to any person or business that is tax-exempt. Winnetka's tax is based on a model ordinance that has been implemented in other communities, according to village documents, and is intended to be a fairness measure, said Trustee Richard Kates.

"What we're doing is creating equity so that everybody is treated identically in the village," Kates said.

North Shore Gas serves most of the village, while Nicor serves a sliver on the south end.